Your government is spying on your life. And as I learned last week, it wants to know a lot more about you...

Before 9/11, you just had to worry about hackers accessing your family's personal data and using it against you... like stealing $32,000 out of your online bank account (which happened to a family member of mine).

But after 9/11, your government can now know everything about you... under the guise of Homeland Security... completely ignoring the Fourth Amendment to the Constitution. (The Fourth Amendment guards against unreasonable search and seizure, requiring a warrant for a search).

I was shocked when I saw last week on Eliot Spitzer's Viewpoint show just how far the government wants to go to know everything about you...

To me, this is not right, at all... Law-abiding citizens have privacy rights protected by the U.S. Constitution.

I don't know how much of this is true or not... But the "experts" on Spitzer's show sure had the right credentials... Thomas Drake, a former senior executive of the National Security Agency (NSA), said:

... just getting access to incredible amounts of data, for people that have no reason to be put under suspicion, no reason to have done anything wrong, and just collect all that for potential future use or even current use, it opens up a real danger – and to what else they could use that data for, particularly when it's all being hidden behind the mantle of national security.

With access to all your e-mails, phone calls, and everything you've ever done with Google and Facebook, the government can know your whole life... And it could probably find something in there to build a case against you of some sort. That's scary.

The government has access to this stuff... typically without your permission. For example, in the second half of 2011, U.S. law enforcement officials requested data on 12,243 Google accounts. Google complied with 93% of those requests.

The government doesn't have to notify you if it wants to check out your Google activity. It just has to ask Google.

The list goes on... The technical tools to spy on larger numbers of ordinary citizens are becoming more sophisticated every day. We have to protect ourselves.

This isn't a "criminal" or "noncriminal" thing. It's about privacy, plain and simple. History shows that when governments take steps to get involved in every aspect of citizens' lives, bad things can happen.

So what can you do? You can attempt to "anonymize" more of your life... starting with your online activity.

One simple way to do this online is to use a service like Cryptohippie's "Road Warrior." It connects your computer to the "Cryptohippie anonymity network," which then encrypts your Internet traffic so no one can see who you are. "Once you connect to our network, you will not only surf the web in privacy, but everything you do on the Internet becomes private, including things like Skype."

You can visit www.cryptohippie.com for the details. It is not cheap... but it gives you some degree of control over your own privacy. Other services exist, but I have used this one myself. I trust the guys behind it, and it works.

You can also STOP putting all the details of your life on Facebook and such... You can use the Startpage search engine instead of Google's. (Note: Gmail users have to be logged out of their accounts for searches through Startpage to be private.) You should use your credit/debit cards less, and use cash instead. The point is to have less of "you" out there...

You see... taking these precautions makes it much harder for anyone to create a profile of you to use against you.

I know, I know... giving up or reducing use of some of these things is hard to do.

It is your call... How much information do you want out there about yourself that could potentially be used against you in the future?

Again, it used to be just hackers that you had to protect your personal data from... Now, you may have to protect your data from your own government as well.

So the next time you want to vent about something or someone online, just imagine if someone from the government was reading it... Because it appears we're heading toward a world where someone from the government could access it... and use it against you someday.

I don't know what the government really knows or wants to know. I don't think we will ever know exactly what they're tracking. We can't control that.

But we do have some control of how much of our lives we make "digital." We have some simple ways to keep more of our personal information away from prying eyes...

Remember, this has nothing to do with whether or not you're a criminal. It's about privacy and protecting your right to it.

These days, it's a smart thing to do...

Good investing,

Steve

Further Reading:

Find a few simple ways to dramatically increase your safety and anonymity online here and here.

DailyWealth classic: In 2009, one of Steve's close family members lost $32,000 to an Internet hacker. "Identity theft is serious stuff," he says. "And you are likely at risk, right now. But you think, 'Aw, that won't happen to me,' until it does. Take care of yourself. Believe me. We wish we had." Get the full story here: A True Story: It Happened to Us... It Could Happen to You.

Market Notes

All month long, we've heard how the yield on the 10-year Treasury note keeps making new historic lows. In fact, last Wednesday, the yield dropped to just 1.4% – the lowest yield of our lifetimes.

But when markets make extreme moves, the reversals can come suddenly and seemingly from out of nowhere. That may be happening now with the 10-year note.

The yield on the 10-year U.S. Treasury note spiked above 1.51% on Friday. It was one of the biggest one-day spikes we've seen all year.

While one day's action does not make a trend, it is worth keeping an eye on. If the yield can get back above 1.6% – where it started the month – the intermediate trend will shift toward higher interest rates and lower bond prices.

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